The bacterial tubulin homologue FtsZ forms a ring-like structure called the Z ring that drives cytokinesis. We showed previously that FtsZ–YFP–mts, which has a short amphipathic helix (mts) on its C terminus that inserts into the membrane, can assemble contractile Z rings in tubular liposomes without any other protein. Here we study mts–FtsZ–YFP, where the membrane tether is switched to the opposite side of the protofilament. This assembled ‘inside-out’ Z rings that wrapped around the outside surface of tubular liposomes. The inside-out Z rings were highly dynamic, and generated a constriction force that squeezed the tubular liposomes from outside. This is consistent with models where the constriction force is generated by curved protofilaments bending the membrane. We used this system to test how GTP hydrolysis by FtsZ is involved in Z-ring constriction. Without GTP hydrolysis, Z rings could still assemble and generate an initial constriction. However, the constriction quickly stopped, suggesting that Z rings became rigidly stabilized in the absence of GTP hydrolysis. We propose that remodelling of the Z ring, mediated by GTP hydrolysis and exchange of subunits, is necessary for the continuous constriction.